FIN 3511 Loan Risk Management

APPLIES TO ACADEMIC YEAR 2012/2013

FIN 3511 Loan Risk Management

Responsible for the course
Trond Eklund

Department
Department of Accounting - Auditing and Law

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
The course covers issues related to credit risk assessments of private businesses. The focus of the course is the ability to serve debt by analyzing future net cash flows and capital requirements. Moreover best practices will be addressed.


Learning outcome
Acquired knowledge
Students must be able to understand important concepts within the credit risks analysis discipline:

  • Have a good understanding of the concept credit risk analysis and risks related to private business exposures.
  • Understand the basic requirements for a private business to survive.
  • Understand how to use information from financial statements in a credit risk analysis.

Acquired skills
Students must be able to evaluate the credit risk by the use of relevant models and tools.
  • Be able to correct and group financial information to be used in a credit risk analysis.
  • Be able to practice models to prepare a basis for decisions.
  • Analyze the credit risk and present it for the decision maker.

Reflections
Students must be capable of demonstrating an ability to critically reflect upon their own role and work.
  • Understand the importance of analyzing the credit risk.
  • Understand the role of a credit risk analyst.
  • Basic knowledge of best practices.

Prerequisites
BØK 3411 Finance and Managerial Accounting I or equivalent.

Compulsory reading
Books:
Eklund, Trond og Knut Knutsen. 2011. Regnskapsanalyse : aktiv bruk av regnskapet. 8. utg. Gyldendal akademisk

Other:
Basel Committee on Banking Supervision. 2000. Principles for the management of credit risk. Lenke til pdf på åpen web. http://www.bis.org/publ/bcbs75.pdf


Recommended reading

Course outline
  • Correcting and assessing financial data and other information prior to analyzing
  • Ratio analysis
  • Cash flow analysis
  • Future capital requirement
  • Required future net internally generated cash flow
  • Risk classification and models for predicting bankruptcy
  • Credit risk and portfolio analysis
  • Loan review
  • Best practices

Computer-based tools
No specified computer-based tools are required.

Learning process and workload
The course is conducted with 36 hours of lectures and 9 hours of exercises. Extensive exercises are of great importance and part of lectures will be used to review assignments. Students are expected to be prepared for the lectures through literature and assignments.

Required work (mandatory mini-exercises)
During the course students must hand in a mandatory assignment.
The asssignment will be handed out with a dead-line of 14 days, and must be handed in individually.

After the deadline feedback will be given by the lecturer. Students must get their assignment approved in order so sit for the final exam.

Recommended use of hours:
Activity
Hours
Lectures
36
Lecture supported exercises
9
Preparations for the lectures
65
Test exam
10
Preparations for the examiniation
80
Total recommended use of hours
200

    Coursework requirements
    In order to sit for final exam students must hand in a mandatory assignment and get it approved by the lecturer.

    Examination
    A three hour individual written exam concludes the course.

    Examination code(s)
    FIN 35111 Written examination, counts 100 % towards the final grade in FIN 3511 Loan Risk Management, 7,5 credits.

    Examination support materials
    All support materials are allowed.
    Exam aids at written examinations are explained under exam information in our web-based Student handbook. Please note use of calculator and dictionary. http://www.bi.edu/studenthandbook/examaids

    Re-sit examination
    Re-sit examination is offered every term.

    Additional information

    Semester

    Oversettelser